The Council of the Law Society of New South Wales ('the Council') filed in the Tribunal an application for disciplinary findings and orders under the Legal Profession Uniform Law (NSW) ('the Uniform Law') in respect of Mr Hammond on 10 February 2020 ('the present application'). The grounds for the application were the same as the grounds relied upon in an earlier application to the Tribunal, in matter number 2019/00182076 ('the first application'), which was dismissed on 2 October 2019, without being heard, because it was affected by procedural defects (see Council of the Law Society of NSW v DXW [2019] NSWCATOD 101). The proceedings were recommenced under clause 23(5)(a) of Part 5 to Schedule 9 of the Legal Profession Uniform Law Application Act 2014 (NSW).
[2]
Background
Mr Hammond was admitted to practice as a solicitor on 9 October 1998. He practised as a sole practitioner from 18 December 2000 until 1 October 2005.
Mr Hammond did not hold a practising certificate from 1 October 2005 to 30 June 2016. From 1 July 2016 to 31 October 2017, Mr Hammond held a practising certificate as an employee of a law practice. He practised from his home, which apparently functioned as a branch office of Turnbull Law Pty Ltd. On 19 May 2016, Mr Hammond registered a business name: 'Creative Legal Group'.
Since 1 November 2017, Mr Hammond has held a practising certificate as a sole practitioner. He practises from his home under the name Hammond Law Firm.
By letter dated 11 August 2017 and completed complaint form dated 12 August 2017 ('Mr Rezaie's complaint'), Mr Mansoor Rezaie complained to the Legal Services Commissioner ('the Commissioner') about certain correspondence which Mr Hammond had sent to him in the context of a legal dispute between Mr Rezaie and Mr Palani, in which Mr Hammond was acting for Mr Palani. Mr Hammond was employed at Turnbull Law Pty Ltd in August 2017.
On 17 August 2017, the Commissioner referred Mr Rezaie's complaint for investigation by the Council. The investigation was undertaken, and ultimately led to the making of a complaint against Mr Hammond. Subsequently, the Council filed the first application in the Tribunal and then, after the first application had been dismissed on account of the procedural issue, the present application.
[3]
Facts
Both parties tendered affidavits setting out facts relevant to these proceedings. The Council tendered an affidavit of Ms Haddad sworn on 11 June 2019 and an affidavit of Mr Lean tendered on 7 February 2020. Mr Hammond tendered his own affidavit, sworn on 15 February 2021. The Council pointed out that Mr Hammond's affidavit is a mixture of facts and submissions, and that is clearly correct. Neither party required the deponent of the affidavit/s tendered by the other party to be available for cross-examination. We therefore treat the factual material in the affidavits as uncontested.
On 21 May 2016, a transfer of property ('the property') to Mr Rezaie and Mr Palani was lodged with NSW Land Registry Services. Ms Eleni Pacelli, a solicitor and employee of Smythe Wozniak Lawyers, is recorded on the transfer as the solicitor for the purchasers.
Mr Palani originally intended to purchase the property jointly with his brother. However, his brother withdrew from the arrangement, and Mr Palani sought another purchaser to be the joint owner with him. Mr Palani approached Mr Rezaie. Mr Rezaie had no funds, so Mr Palani took out a personal loan of $30,000 and paid it into Mr Rezaie's bank account to make Mr Rezaie a more attractive proposition from the point of view of a lender, in order to facilitate the joint purchase of the property with Mr Palani. Mr Rezaie agreed to make periodic repayments of the personal loan of $30,000 to Mr Palani. Mr Rezaie also agreed to make contributions to the repayment of the further loan secured by a mortgage over the property.
Two months after the settlement of the purchase of the property by Mr Palani and Mr Rezaie, Mr Rezaie stopped making any repayments to Mr Palani of the personal loan.
Mr Palani and Mr Rezaie had agreed that boarders would be found for the property, and that their rental monies would be paid into a dedicated account. Those funds would then be used to pay the periodic payments due on the loan secured by the mortgage, with any shortfall being made up with funds provided equally by Mr Palani and Mr Rezaie.
Soon after boarders began paying rent, Mr Rezaie arranged to have that rent either paid to him in cash or paid into his personal bank account.
Mr Palani made an effort to keep the property in good condition. He repainted the dwelling on the property twice. However, he was frustrated in his efforts by the boarders and by Mr Rezaie, whose activities were not consistent with keeping the property clean and tidy. At one point, the local government authority served a notice requiring that the back yard be cleared of grass and weeds, whether alive or dead, because the yard had deteriorated to the point where it was considered to be at risk of harbouring vermin.
Mr Palani was very upset by Mr Rezaie's actions, and was often tearful when giving instructions to Mr Hammond. Mr Hammond was concerned about Mr Palani's mental health. Mr Palani read all of Mr Hammond's correspondence to Mr Rezaie on his behalf in draft, and instructed him on every occasion to make the letter 'a bit stronger'. Mr Hammond did so, believing that Mr Rezaie's character was such that he would not believe that the letters were threatening. Mr Hammond himself did not believe that the letters were threatening.
At all relevant times, including throughout the process of purchasing the property, Mr Rezaie held a bridging visa as a refugee applying for Australian residency. Mr Rezaie did not make the mandated pre-purchase application to the Foreign Investment Review Board for 'foreign investment approval' under the Foreign Acquisitions and Takeovers Act 1975 (Cth).
The Foreign Acquisitions and Takeovers Act 1975 (Cth) provides for both civil and criminal penalties for non-compliance. The maximum civil penalty is 10% of the purchase price paid for the property or 10% of the market value of the interest acquired in the property. The quantum of the penalty may be reduced if notification of the breach is given before the issue of an infringement notice.
Mr Hammond was engaged by Mr Palani, at a point subsequent to the purchase of the property. He wrote a letter dated 14 February 2017 in the following terms to Mr Rezaie:
RE: DELSHAS PALANI - Property Dispute [sic. Mr Palani's first name was actually Deshad]
We understand that you have deliberately damaged or destroyed our client's property, namely building materials for a granny flat. We put you on notice, that should any further damage or deliberate obstructions be made by you, in regards to the granny flat, then we will be seeking that you be charged with malicious damage and/or that a statement of claim be filed in the Local Court seeking damages.
Further, our client wishes to either pay you your share of the property or sell the property. Kindly advise if you agree. If you do not agree, then we have instructions to file documents in the Supreme Court of NSW and seek costs against you.
We strongly advise that you seek legal advice regarding this matter. However, if we do not hear from you by 5:00PM 28 February 2017, we have instructions to proceed with our client's application in the Supreme Court and to seek costs.
Mr Hammond wrote a second letter to Mr Rezaie on 14 February 2017 in the following terms (although this was the second letter sent by Mr Hammond to Mr Rezaie, it is referred to in the application as 'the First letter', so we will refer to it as 'the First letter' to avoid compounding the confusion):
RE: DELSHAS PALANI - Property dispute [sic]
We have been advised that you arrived in Australia [as] a refugee and as such you have the lowest status of any Bridging Visa with no right to purchase land. If this is the case, you must agree to sell your share of the property to our client.
On the facts that we have, you may have committed fraud on the Commonwealth, which is a very serious offence and would go to your character. We require proof of your visa status at the time of purchasing the property or that you have approval from the Foreign Investment Review Board.
Our client does not want to provide this information to Immigration as it would adversely affect you obtaining Australian Residency or if you have already obtained the same, cancellation of your Residency.
We strongly advise that you seek legal advice regarding this matter. However, if we do not hear from you by 5:00PM 28 February 2017, we have instructions to proceed with our client's application in the Supreme Court and to seek costs.
Mr Hammond wrote another letter to Mr Rezaie on 26 February 2017 in the following terms ('the Second letter'):
RE: DELSHAS PALANI - Property Dispute [sic]
We have been advised by our client that whilst you agree to transfer share in the property to our client but cannot agree to the amount, but more importantly you have not communicated to us as to your intentions.
We understand that you have paid a total of $63,600.00. However, there is also a deduction of 50% of the stamp duty of $15,125.00 = $48,474 plus $10,000 for the concrete driveway = $58,474.00. In order to settle this matter, our client is prepared to pay you the sum of $60,000.
We also understand that you have been taking cash from the boarders and putting it directly into your account then into the joint loan account, instead of going directly into the joint loan account. We also understand that you have kept some of the cash and not putting it into any account [sic]. If necessary, we will subpoena your bank account to show the cash deposits.
We believe there has been little or no increase in the value of the property since purchase. Further, our client must pay considerable stamp duties to the OSR and is incurring considerable legal costs because of your fraud on the Commonwealth.
Once we commence legal proceedings in the Supreme Court, the court will be notified of your fraud on the Commonwealth, which is a very serious offence and there will be no option but to refer this matter to the Federal Police and to Immigration. A conviction will go to your character and, Immigration may well cancel your visa and/or your Permanent Residency.
We advise that ignorance of the law is not a defense [sic]. Further, you should have provided your solicitor with a copy of your passport. Once the solicitor saw that it was a foreign passport he would have asked you to provide proof of your residency. The failure to provide your passport may well draw an adverse inference that you deliberately did not want the solicitor to see your passport.
We strongly advise that you seek legal advice regarding this matter. However, if we do not hear from you by 5:00PM 3 March 2017 (note extension from previous letter), we have instructions to proceed with our client's application in the Supreme Court and to seek costs. No further extensions will be forthcoming.
We look forward to hearing from you or your solicitor.
The letterhead used by Mr Hammond for each of the letters contains a logo, which appears to be a sketch of a roof top, with the scales of justice in front of it. Beside the logo, in small letters, there appear the words 'Turnbull Law Pty Ltd t/as', and, under those words, in much larger letters 'Creative Legal Group'.
Mr Rezaie's complaint related to the First letter. The Council's complaint related to the Second letter.
Mr Rezaie obtained legal advice from Ms Xu. On 3 March 2017, he made an on-line self-disclosure to the Foreign Investment Review Board in relation to the purchase of the property. Mr Hammond was not informed of this.
Ms Xu wrote to Mr Hammond on behalf of Mr Rezaie on 10 March 2017. The letter said, in part:
…We are instructed to advise you that reporting someone to an authority for an alleged breach of the foreign investment rules is an action which can be legally justified if it is done for a legitimate purpose. However, it if has been used as a 'tactic' to threaten someone in order to obtain a gain is indeed a very different matter.
We are instructed that our client is willing to transfer his right and interest in the abovementioned property for the current market value and your client will be given the first priority to acquire our client's interest.
…
At the time of Ms Xu's letter, there had been no indication on behalf of Mr Rezaie as to the price he would accept for his interest in the property.
Another solicitor employed by Turnbull Law Pty Ltd, Mr Kasif, briefly took over the conduct of the matter on about 10 April 2017.
Shortly before 17 May 2017, Mr Palani committed suicide. Mr Kasif informed Ms Xu of this by telephone on 17 May 2017. On the same day, Mr Kasif sent Ms Xu an email saying that Mr Hammond would be 'managing' the matter.
On 15 July 2017, contracts for the sale of the property were exchanged, following negotiations between Mr Rezaie and Mrs Palani, through their solicitors.
In October 2017, settlement of the sale of the property occurred, with the proceeds held in trust pending an agreement as to the division of the proceeds by Mr Rezaie and Mrs Palani.
[4]
The Application
The present application referred to and adopted the grounds for the application set out in the first application. Mr Hammond is referred to in both applications as 'the Solicitor' or 'the solicitor'.
The first application referred to Rule 34 of the Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 (the Conduct Rules), which provides:
34 Dealing other persons
34.1 A solicitor must not in any action or communication associated with representing a client:
34.1.1 make any statement which grossly exceeds the legitimate assertion of the rights or entitlements of the solicitor's client, and which misleads or intimidates the other person,
34.1.2 threaten the institution of criminal or disciplinary proceedings against the other person if a civil liability to the solicitor's client is not satisfied, or
34.1.3 use tactics that go beyond legitimate advocacy and which are primarily designed to embarrass or frustrate another person.
34.2 In the conduct or promotion of a solicitor's practice, the solicitor must not seek instructions for the provision of legal services in a manner likely to oppress or harass a person who, by reason of some recent trauma or injury, or other circumstances, is, or might reasonably be expected to be, at a significant disadvantage in dealing with the solicitor at the time when the instructions are sought.
The grounds set out in the first application and adopted by the second application are:
FRANK DOUGLAS HAMMOND is guilty of professional misconduct on the following grounds:
Complaint by Mansoor Rezaie
Ground 1: Sent intimidating and threatening letter dated 14 February 2017 to the complainant
Complaint by the Law Society
Ground 2: The solicitor wrote threatening and intimidating letters.
The following particulars of Ground 1 were set out in the first application and adopted in the present application:
13. The First Letter was intimidating and threatening as the First Letter:
(a) was a communication for the purposes of resolving a property dispute between Mr Rezaie and Mr Palani;
(b) was made by the Solicitor acting as an Australian legal practitioner and in the course of legal practice;
(c) represented that by reason of Mr Rezaie's visa status, Mr Rezaie must sell his share of the Property to Mr Palani, being a statement which:
(i) grossly exceeded the legitimate assertion of the rights or entitlements of Mr Palani; and
(ii) was intimidating, both on its face and in light of the Solicitor's previous correspondence as referred to in paragraph 11 of the Application.
(d) alleged that on the facts available to the Solicitor, Mr Rezaie "…may have committed fraud on the Commonwealth, which is a very serious offence…", and
(e) sought to intimidate Mr Rezaie by suggesting that Mr Palani would provide information of Mr Rezaie's alleged fraud on the Commonwealth to Immigration.
The reference in paragraph 13(c)(ii) of the application to 'paragraph 11 of the Application' was a reference to the First letter written by Mr Hammond to Mr Rezaie on 14 February 2017, which is quoted above at [18].
The following particulars of Ground 2 were set out in the first application and adopted in the second application, after reference to the facts and to the Second letter:
16. The Second letter was threatening and intimidating in that the Second letter:
(a) was a communication for the purpose of resolving a property dispute between Mr Rezaie and Mr Palani;
(b) was made by the Solicitor acting as an Australian legal practitioner and in the course of legal practice;
(c) was made in circumstances where Mr Rezaie had purportedly agreed to transfer his share of the Property to Mr Palani, however there was no agreement as to the amount to be paid by Mr Palani to Mr Rezaie;
(d) alleged that Mr Rezaie had been depositing money received from boarders living at the Property into his own bank account, which was subsequently transferred into a joint loan account, rather than directly depositing such monies into a joint loan account;
(e) threatened to "…subpoena [Mr Rezaie's} bank account to show the cash deposits";
(f) represented that Mr Palani "…must pay considerable stamp duties to the OSR…" such representation being a statement which:
(i) grossly exceeded the legitimate assertion of the rights or entitlements of Mr Palani; and
(ii) was intimidating;
(g) represented that Mr Palani was "…incurring considerable legal costs because of [Mr Rezaie's] fraud on the Commonwealth';
(h) represented that Mr Palani was going to commence unspecified proceedings against Mr Rezaie in the Supreme Court;
(i) alleged that Mr Rezaie had engaged in fraud on the Commonwealth;
(j) alleged that the Supreme Court would be notified of Mr Rezaie's fraud on the Commonwealth;
(k) that, in relation to Mr Rezaie's fraud on the Commonwealth, Mr Palani had "…no option but to refer this matter to the Federal Police and to Immigration…";
(l) represented that a "conviction will go to your character and, Immigration may well cancel your visa and/or your Permanent Residency"; and
(m) alleged that Mr Rezaie failed to provide his solicitor with a copy of his passport and that such failure may result in an adverse inference being drawn against Mr Rezaie that this was a deliberate act.
17. Further, in sending the First letter and the Second letter, the Solicitor engaged in a course of conduct which was threatening and intimidating.
[5]
Uniform Law and professional misconduct
The Uniform Law defines and describes professional misconduct as follows:
297 Professional misconduct
(1) For the purposes of this Law, professional misconduct includes -
(a) unsatisfactory professional conduct of a lawyer, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence; and
(b) conduct of a lawyer whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the lawyer is not a fit and proper person to engage in legal practice.
(2) For the purpose of deciding whether a lawyer is or is not a fit and proper person to engage in legal practice as referred to in subsection (1)(b), regard may be had to the matters that would be considered if the lawyer were an applicant for admission to the Australian legal profession or for the grant or renewal of an Australian practising certificate and any other relevant matters.
298 Conduct capable of constituting unsatisfactory professional conduct or professional misconduct
Without limitation, the following conduct is capable of constituting unsatisfactory professional conduct or professional misconduct -
…
(b) conduct consisting of a contravention of the Uniform Rules;
…
[6]
Mr Hammond's submissions
In his Reply, filed on 8 September 2020, Mr Hammond denied Ground 1 and Ground 2 of the present application. The Council subsequently raised the issue of the impact of the decision of the Court of Appeal in Carr v Council of the Law Society of NSW [2020] NSWCA 276 ('Carr') upon this matter. Mr Hammond, in effect, has made submissions in his affidavit of 15 February 2021 in relation to Carr.
In his affidavit, Mr Hammond conceded that he should have worded that part of the First letter which related to the potential for criminal proceedings to be instituted in a different way. At the hearing, Mr Hammond submitted that his concession should be understood as having been arrived at in hindsight. He submitted that the factual context in which he was acting needs to be understood.
With respect to Rule 34 of the Conduct Rules, Mr Hammond said that there was no intention to intimidate Mr Rezaie. He said that he did not 'knowingly' breach Rule 34, and that, 'at its best' his conduct may have been 'mere negligence', which is not sufficient to found a finding of professional misconduct or unprofessional conduct. Mr Hammond said that to make a disciplinary finding adverse to him the Tribunal would have to find that he had actual knowledge that he was breaching the Conduct Rules, presumably at the time that he wrote the letters.
In his submissions filed on 10 November 2020, Mr Hammond said that, in hindsight, he should have maintained 'level argument' in his correspondence with Mr Rezaie. Mr Hammond mentioned that Mr Palani was greatly affected by the aggression shown to him by Mr Rezaie when Mr Palani approached him. At one point, this aggression allegedly took the form of the demolition of a building on the property by Mr Rezaie.
Mr Hammond said, in his submissions, that he became caught up in Mr Palani's emotions, and his judgment was clouded as a result. Once Mr Rezaie stopped making repayments with respect to the $30,000 personal loan, Mr Palani found it difficult to make ends meet, financially. Mr Hammond clearly had a great deal of sympathy for Mr Palani, who, he believed, was being very badly mistreated by Mr Rezaie. Mr Hammond conceded that his letters were more forceful than they should have been, and that he should have thought about how they might be perceived.
In his affidavit of 15 February 2021, Mr Hammond emphasised that that he had said in the First letter that Mr Rezaie may have committed an offence, not that he had done so. He said that he had meant to indicate that the Foreign Investment Review Board might institute criminal proceedings, as he was clear that neither he nor Mr Palani could do so, and he conceded that the letter could have been better worded in that respect. Mr Hammond said that his reference to Mr Rezaie's immigration status was not intended as a tactic or threat, but was simply a statement of fact. He said that for a statement to be a 'threat', there must be some gain or advantage to the person making the threat, and here there was none.
In his affidavit of 15 February 2021, Mr Hammond submitted that, in writing the letters, he had sought to obey Rule 8 of the Conduct Rules 2015, which says:
8 Client instructions
8.1 A solicitor must follow a client's lawful, proper and competent instructions.
Mr Hammond, in his affidavit of 15 February 2021, relied upon all of the events, which he recounted, which he said illustrated Mr Rezaie's bad character. At paragraph 54, Mr Hammond said:
One must look at the character of the person to whom the letter is intended and all the surrounding circumstances so as to determine if it would be perceived as threatening or intimidating by that person. Clearly, given all the information provided, it would not be so perceived by Mr Rezaie or by me. It would in effect be like "water off a duck's back" and that is how it was perceived.
In his affidavit of 15 February 2021, Mr Hammond submitted that there should not be a finding that he was guilty of professional misconduct or unsatisfactory professional conduct.
[7]
Is the First Letter objectively threatening and intimidating
The First letter is set out at [18], above. The particulars pleaded in relation to Ground 1, which is the allegation that the First letter is threatening and intimidating, are set out in [32] above.
Particulars (a) and (b) have been established and are not in dispute.
Particular (c) alleges that the First letter represented that 'by reason of Mr Rezaie's visa status, Mr Rezaie must sell his share of the Property to Mr Palani'. We find that the First letter does make that representation, in its first paragraph.
Particular (c)(i) alleges that the representation "grossly exceeded the legitimate assertion of the rights or entitlements of Mr Palani". We agree. It was not the case, as a matter of law, that an inevitable consequence of Mr Rezaie's visa status was that he must sell his share of the property to Mr Rezaie.
Particular (c)(ii) alleges that the statement was intimidating, both on its face and in light of Mr Hammond's previous correspondence of the same day, which was 14 February 2017. The Macquarie Dictionary defines 'intimidating' as:
1. threatening
2. overwhelming: an intimidating task.
The Macquarie Dictionary defines 'threat' as
1. a declaration of an intention or determination to inflict punishment, pain or loss on someone in retaliation for, or conditionally upon, some action or course; menace.
2. an indication of probable evil to come; something that gives indication of causing evil or harm.
3. a person or thing which is deemed to have a negative impact on one's fortunes.
We determine that the representation in the first paragraph of the First letter was intimidating, on an objective basis, in that it sought, without a proper basis, to overwhelm Mr Rezaie's will, by leading him to believe, incorrectly, that he had no choice but to sell his interest in the property to Mr Palani on account of Mr Rezaie's visa status.
Particular (d) asserts that the First letter said that, on the facts available to Mr Hammond, Mr Rezaie "may have committed fraud on the Commonwealth, which is a very serious offence…". Particular (d) has been established on the face of the First letter. It is not clear on what basis Mr Hammond thought that anything done by Mr Rezaie amounted to fraud, or what Mr Hammond meant by 'fraud on the Commonwealth'.
Particular (e) asserts that the First letter sought to intimidate Mr Rezaie by suggesting that Mr Palani would provide information of Mr Rezaie's alleged 'fraud on the Commonwealth' to 'Immigration'. The letter actually says:
Our client does not want to provide this information to Immigration as it would adversely affect you obtaining Australian Residency or if you have already obtained the same, cancellation of your Residency.
We are satisfied that, in context, the implied meaning of that passage of the First letter to a reasonable reader, was that Mr Palani was, in fact, likely to provide the information that Mr Rezaie purchased an interest in property whilst in Australia on a bridging visa without first obtaining Foreign Investment Review Board approval if Mr Rezaie did not comply with the asserted obligation to transfer his interest in the property to Mr Palani. Read objectively, it was a threat, couched in stand-over style language, and it was intimidating.
Mr Hammond relied upon his use of the word 'may' in the First letter, where he wrote:
…you may have committed fraud on the Commonwealth.
In context, we do not consider that the use of the word 'may' in that passage saves the First letter from being objectively threatening and intimidating. In our opinion, the First letter is objectively threatening and intimidating.
[8]
Is the Second letter objectively threatening and intimidating
The Second letter is set out at [19], above. The particulars pleaded in relation to Ground 2, which is the allegation that the Second letter is threatening and intimidating, are set out in [34] above.
Particulars (a) to (e) are established on the face of the Second letter.
Particular (f) relates to that part of the Second letter which said:
…our client must pay considerable stamp duties to the OSR and is incurring considerable legal costs because of your fraud on the Commonwealth.
Particular (f) alleges that this part of the Second letter 'grossly exceeded the legitimate assertion of the rights or entitlements of Mr Palani' and 'was intimidating'. We consider that particular (f) is confused. At the time that the letter was written, any stamp duty due on the purchase of the property by Mr Palani and Mr Rezaie must already have been paid. The letter is alluding to a present or future liability for stamp duty, not a past liability. We infer that Mr Hammond had in mind the possibility that Mr Palani would have to pay stamp duty in respect of his proposed future purchase of Mr Rezaie's share of the property. That was only one of several possible outcomes of the dispute and, as matters transpired, did not eventuate. In any event, it was not an assertion of the rights or entitlements of Mr Palani, but an expression of an apprehension of future liability. That particular passage of the Second letter also did not contain anything intimidating. Particular (f) has not been established. The passage quoted was not intimidating, but it was misleading in that it implied that Mr Palani had incurred a present, unavoidable liability for stamp duty because of Mr Rezaie's actions.
Particulars (g) - (m) have been established on the face of the Second letter. The reference to Supreme Court proceedings in the Second letter does not specify what kind of proceedings are in contemplation, or what the basis for those proceedings might be. It is not clear what was meant by the statement that the Supreme Court would be 'notified' of Mr Rezaie's 'fraud on the Commonwealth', or why such a thing would occur. It was not true to say that Mr Palani would have 'no option but to refer this matter to the Federal Police and to Immigration'.
It is alleged that the Second letter was threatening and intimidating. We determine that the part of the Second letter which refers to the future commencement of legal proceedings in the Supreme Court, which would involve the notification to the Court of Mr Rezaie's 'fraud on the Commonwealth' and which would lead to a situation where 'there will be no option but to refer this matter to the Federal Police and to Immigration', and that part of the Second letter which says 'a conviction will go to your character and Immigration may well cancel your visa and/or your Permanent Residency' are objectively threatening and intimidating. The Second letter is objectively threatening and intimidating.
[9]
Context, Mr Hammond's intention and Mr Rezaie's vulnerability to threats and intimidation
The Council drew our attention to the decision of Beech-Jones J in Provident Capital Ltd v Anderson (No 3) [2013] NSWSC 705 at [36]:
A legal practitioner does not have to have a subjective belief in the complete accuracy of every assertion they make on a matter of law either in submissions or in correspondence engaged in on behalf of their client. In the ordinary course, it may suffice if the practitioner considers that a relevant assertion on a matter of law is something which is reasonably open on the current state of the law. Of course whether that is so will always depend upon the context. However, it is difficult to envisage any circumstance in which a solicitor could arm their client with a letter advising them that they should ignore the orders of a superior Court.
The Council submitted, and we accept, that it is not necessarily inappropriate for a lawyer, in negotiation, to indicate that the commission of a possible crime will be referred to the appropriate authorities, in circumstances where there is some basis in fact to apprehend that a crime has been committed. The Council referred to de Jersey CJ in Legal Services Commissioner v Sing [2007] 2 Qd R 158;
There is a continuum applicable to practitioners, with legitimate pressure at the one end, and improper intimidation at the other. It may, in any particular case, be difficult to delineate the precise point at which any application of pressure becomes improper. That is why practitioners must be extremely careful before resorting to any even arguably threatening conduct. They are well advised to err on the side of caution, as in all aspects of their professional approach. With the increasingly intense demands of clients, and the high level of competition which these days characterises the practice of the law, practitioners will inevitably be asked to stretch the limits of their consciences: they must be steadfast not to yield to that temptation.
Mr Hammond asked us to take into account the context of the writing of the letters, including Mr Palani's emotional state and Mr Hammond's response to it. Mr Hammond relied upon Rule 8 of the Conduct Rules, submitting that, in writing the First letter and the Second letter, he was obeying Rule 8 by following Mr Palani's lawful, proper and competent instructions. We reject this argument. Assuming that Mr Hammond had the explicit instructions from Mr Palani with respect to the terms of the letters that he attested to in his affidavit of 15 February 2021, then such instructions were not 'proper' within the meaning of Rule 8 of the Conduct Rules because they were in breach of Rule 34 of the Conduct Rules. That breach consisted of the making of a statement which grossly exceeded the legitimate assertion of the rights and entitlements of Mr Palani, in the first paragraph of the First letter. The implicit threat to take steps to bring about a prosecution of Mr Rezaie for 'fraud on the Commonwealth' was also a breach of Rule 34.
Mr Hammond argued that it was necessary, in order to establish both Ground 1 and Ground 2 of the application, that the Council prove that he intended the First letter and the Second letter to be threatening and intimidating.
The Council, in its submissions in reply, referred to the decision of the Court of Appeal in Griffin v Council of the Law Society of New South Wales [2016] NSWCA 364. In that matter, the appellant had written an ex parte letter to a Judge of the Federal Court of Australia which made unfounded allegations and contained threats. The appellant was found guilty in the Tribunal of professional misconduct, and appealed to the Court of Appeal, partly upon the basis that the Tribunal had erred in characterising the language in his letter as "offensive" and "grossly offensive", having regard to the implied constitutional freedom of political communication. In dismissing the appeal, the Court of Appeal decided that the content of the letter must be judged upon their face. Sackville AJA (Ward and Gleeson JJA agreeing) said at [112]:
112. The contents of the Letter must be judged on their face. There is not a shred of evidence advanced in the Letter to support any of the allegations of impropriety made against the Judge. The "discourtesy" and "offensiveness" lay both in the making of scurrilous allegations by the Solicitor about the Judge's conduct, and the manifest absence of any material that could possibly justify making the allegations in any forum, let alone in a private communication to the Judge. The Letter showed that the Solicitor was prepared to make allegations that the judicial process had been undermined by improper behaviour of the Judge, without any material that could justify any such allegation. Moreover, the Letter was "discourteous" and "offensive" because it implied that the Judge would be prepared to alter costs orders because of a threat that he could be embarrassed by the Solicitor's "legitimate" actions.
113. In my view, the Tribunal was entitled to find that the Solicitor was guilty of professional misconduct on the basis of the contents of the Letter. …
Mr Hammond wrote the First letter and the Second letter as a solicitor in the course of legal practice. Whilst he may not have had the text of Rule 34 of the Conduct Rules or the words 'threaten' and 'intimidate' uppermost in his mind as he wrote, it is obvious from the face of the letters that his dominant purpose in writing the letters was to warn of adverse consequences to Mr Rezaie (i.e. the provision of adverse information to 'Immigration', with consequent impact upon his Residency, the commencement of legal proceedings in the Supreme Court with notification of 'your fraud on the Commonwealth, and the referral of the matter to the Federal Police and to 'Immigration', with likely cancellation of Mr Rezaie's visa and/or his Permanent Residency) if he did not do as Mr Hammond, on behalf of Mr Palani, was telling him he must do (i.e. agree to sell his share of the property to Mr Palani). This conforms with the dictionary and ordinary usage of the terms 'threat', 'threaten' and 'intimidate'. The letters are not ambiguous. Some of the threats involve untrue statements, or are misleading. Regardless of the way in which Mr Hammond framed the purpose of the letters in his own mind, they were, as a matter of fact, threatening and intimidating on their face.
Mr Hammond argued that Mr Rezaie's character was such that he would not have felt threatened or intimidated by the letters. This is contradicted by Mr Rezaie's complaint in relation to the First letter, in which he said:
In February 2017, I received a letter dated 14 February 2017 from Mr Hammond demanding me to sell my share to his client. The letter was written in such a way which I believe it has gone beyond the legitimate pressure to amount to improper intimidation and threatening conduct.
In any event, as we have said, the letters are threatening and intimidating on their face, and were clearly sent, on the basis of very little information, in an effort to induce Mr Rezaie to sell his interest in the property to Mr Palani so as to avoid the adverse consequences set out in the letters.
Mr Hammond argued that, in order to be threatening or intimidating, some advantage beyond what Mr Palani was entitled to as a matter of law must have been intended to flow to him arising from the letters. No explanation or authority was advanced for this proposition. It is without foundation. We reject it.
We are satisfied on the balance of probabilities that the First letter and the Second letter were threatening and intimidating.
[10]
The question of whether the writing and sending of the letters amounts to unsatisfactory professional conduct or professional misconduct
The definition of professional misconduct in the Uniform Law is set out above at [35].
The Uniform Law defines unsatisfactory professional conduct as follows:
296 Unsatisfactory professional conduct
For the purposes of this Law, unsatisfactory professional conduct includes conduct of a lawyer occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer.
The Uniform Law also provides, in s 302:
302 Determination by designated tribunal - disciplinary matters
...
(3) The designated tribunal may find a person guilty of unsatisfactory professional conduct even though the complaint or charge alleged professional misconduct.
Mr Hammond argued that the writing of the letters could be characterised as 'mere negligence', which is not sufficient to constitute either professional misconduct or unsatisfactory professional conduct.
The Council, in its submissions in Reply, referred to Myers v Elman [1940] AC 282 at 288, in which Viscount Maughan said:
…a solicitor may be struck off the rolls or suspended on the grounds of professional misconduct, words which have been properly defined as conduct which could reasonably be regarded as disgraceful or dishonourable by solicitors who are of good repute and competency. Mere negligence, even of a serious character, will not suffice.
The Council then referred to the decision of Reynolds and Hutley JJA in Re Mayes & the Legal Practitioners Act [1974] 1 NSWLR 19 at 25, where, after referring to the passage from Myers v Elman in [77] above, it was said:
Despite this dictum there is no reason in principle why conduct which can be classified as negligent cannot amount to professional misconduct.
Mr Hammond's argument is misconceived in any event. He is not facing disciplinary action on account of alleged negligence. The allegations against him are allegations of unethical conduct.
The letters the subject of these proceedings contained statements which were misleading, together with predictions of future Supreme Court proceedings of an unspecified kind, and reports to various authorities, for the purpose of inducing Mr Rezaie to sell his share of the property to Mr Palani to avoid the negative consequences of those future proceedings and reports, namely the cancellation of Mr Rezaie's Residency, if he had it, an adverse outcome of any future application for Residency if he did not and possible conviction of a criminal offence.
At the time that he wrote the letters, Mr Hammond understood that Mr Rezaie was a refugee who was in Australia on a bridging visa. At the time that the letters were written, Mr Rezaie was unrepresented. To some extent, the misleading information in the letters was an attempt to take advantage of Mr Rezaie's disadvantaged position. This is so even if Mr Hammond's unfavourable assessment of Mr Rezaie's character is accepted.
We take into account Mr Hammond's empathetic response to Mr Palani's emotional state. We also take into account Mr Hammond's poor health and his anxiety about the poor health of another person close to him.
We find that Mr Hammond's conduct in writing the letters was conduct which fell short of the standard of competence and diligence that a member of the public is entitled to expect of a legal practitioner, and therefore comes within the definition of unsatisfactory professional conduct.
We further note that Mr Hammond's conduct is in breach of Rule 34 of the Conduct Rules, which is specified in s 298(b)of the Uniform Law, set out in [35] above, as conduct capable of constituting professional conduct or professional misconduct.
The question, then, is whether the unsatisfactory professional conduct 'involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence' and thus amounts to professional misconduct.
The Council submitted that, in writing and sending the letters, in circumstances where Mr Rezaie, a refugee, was unrepresented, Mr Hammond unfairly used his professional position to intimidate and threaten Mr Rezaie. The Council submitted that Mr Hammond's conduct was discourteous and likely, to a material degree, to diminish confidence of the public in the administration of justice, or bring the profession into disrepute. We accept the Council's submissions. We consider that Mr Hammond's unsatisfactory professional conduct involved a substantial failure to maintain a reasonable standard of competence and diligence (which implies ethical practice). Given that the First letter was followed by the Second letter, the unethical behaviour was also consistent.
We find Mr Hammond guilty of professional misconduct.
[11]
Protective Orders
In its application, the Council sought orders that Mr Hammond be reprimanded, that he pay a substantial fine and that he undertake specified training in ethics. Subsequently, the Council withdrew its application for an order for a substantial fine.
The Council sought an order for costs in accordance with Clause 23(1) of Schedule 5 of the Civil and Administrative Tribunal Act 2013 (NSW).
We consider that the orders sought by the Council are appropriate. In saying that, we have had regard to Mr Hammond's prior disciplinary history, as provided by the Council. We also have regard to Mr Hammond's health and circumstances. Mr Hammond indicated that, were he to be found guilty of professional misconduct, he would not object to the orders sought, except that he considered that the defence of the proceedings had provided him with sufficient training in ethics.
We make the following orders:
1. Mr Hammond is reprimanded.
2. Mr Hammond must undertake an appropriate course in ethics (the Course) as approved by the Director, Professional Standards of the Law Society of New South Wales (the Director) and must achieve a pass mark of no less than 50% (pass mark), and Mr Hammond must undertake the Course within 6 months of the date of this order, or within such further time as may be agreed by the Law Society of New South Wales.
3. Mr Hammond must, within seven days of receiving notification of the result of his participation in the Course, provide to the Director the original of such notification.
4. Mr Hammond is to pay the costs of the Council of the Law Society of New South Wales to be agreed or assessed.
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 04 May 2021